plaintiff, the federal trade commission cttc''), for its ...plaintiff, the federal trade...

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

FEDEM L TR ADE COM M ISSION,

Plaintiff,

A+ FINANCIAL CENTER, LLC, a Florida

lim ited liability company, also doing business as

ACCELER ATED FINANCIAL CENTERS,

LLC,

ACCELER ATED ACCOUNTING SERVICES

LLC, a Florida lim ited liability company,

CH RISTOPHER L. M IANO , individually and

as the m anaging m ember of Accelerated

Accotmting Services LLC, and

DANA M . M IANO, individually and as the

managing mem ber of A+ Financial Center, LLC,

Defendants.

FILED UNDER SEAL

COM PLAINT FOR PERM ANENT INJUNCTION

AND OTH ER EOUITABLE RELIEF

Plaintiff, the Federal Trade Commission CTTC''), for its Complaint alleges:

The FTC brings this action tmder Sections 13(b) and 19 of the Federal Trade

Commission Act (ITTC Act''), 15 U.S.C. jj 53(b) and 57b, and the Telemarketing and

Constlmer Fraud and Abuse Prevention Act CûTelemarketing Act''), 15 U.S.C. jj 6101-6108, to

obtain temporary, preliminary, and permanent injunctive relief, rescission or reformation of

contracts, restitution, the refund of monies paid, disgorgem ent of ill-gotten m onies, and other

equitable relief for Defendants' acts or practices in violation of Section 5(a) of the FTC Act, 15

Case 2:12-cv-14373-DLG Document 1 Entered on FLSD Docket 10/23/2012 of 25

U.S.C. j 45(a), and in violation of the FTC'S ût-felemarketing Sales Rule'' (ûtTSR''), 16 C.F.R.

Part 310.

SUM M ARY OF TH E CASE

Since at leastNovember 2009, Defendants have been engaged in atelemarketing

schem e in which Defendants, either directly or through one or m ore intermediaries, have been

responsible for placing hundreds of thousands of illegal telem arketing calls - m ost of which start

with illegal prerecorded ttrobocalls'' - to consum ers al1 across the country to sell phony credit-

card interest rate reduction services.

During these calls, constlm ers typically hear a prerecorded m essage from a

female voice who often says her name is tdRachel.'' ldRachel's'' message offers consum ers the

opportunity to substantially lower their credit card interest rates and instnzcts them to press a

number on their phone to be connected to a live representative for further details. W hen the

consum er presses the number on their telephone keypad, the consum er is connected to a live

representative who works for Defendants.The representative, however, tells the consum er he or

she works for dtcard Services,'' which tricks m any constlm ers into thinking that Defendants have

som e affiliation with the consum er's bank or credit card company.

After gaining the consumer's trust with this deception, Defendants' live

representative obtains credit card infonnation from the constuner that the representative then

uses to detennine whether the consllmer has enough available credit to cover a fee ranging from

$495 to $1,595 and, if so, to charge the consumer's credit card that fee. In exchange for this up-

front fee, Defendants' live representative guarantees the consumer that: (a) Defendants will be

able to substantially reduce the interest rates on the consumer's credit cards, often promising

rates as 1ow as 6% or even 0%., (b) using Defendants' services will save the consumer thousands

of dollars of interest; (c) the nmount of interest the consumer will save with lowered interest rates


will exceed the amount of Defendants' fee; and (d) the consumer will be able to get out of debt

three to five times faster with Defendants' help.Defendants' claim s are inherently deceptive

because m ost banks will not agree to lower a consum er's interest rates at a1l or, at m ost, will only

agree to a very m odest reduction in interest rate that falls far short of the signiticantly low

interest rates Defendants guarantee in their calls.

After collecting their up-front fee from the consum er, Defendants sometim e

undertake a few rudim entary efforts to m ake it seem like they are attempting to reduce the

constlmer's credit card interest rates, such as setting up calls with the consum er's bnnks to ask

for a lower interest rate or advising the consum er to open a new credit card with an introductory

interest rate and then transfer existing balances to the new card. These tactics, however, rarely

succeed in obtaining any reduction in interest rates for the constzm er, let alone the significant and

long-tenn reductions and savings that Defendants prom ise in their initial call. In short, most

constlmers who pay Defendants' hefty up-front fee end up with little to show for it, as they save

little to no m oney, are tmable to get out of debt any faster, and do not receive the lowered credit

card interest rates Defendants promised them .

JURISDICTION AND VENUE

This Court has subject matterjtlrisdiction ptlrsuant to 28 U.S.C. jj 1331, 1337(a),

and 1345, and 15 U.S.C. jj 45(a), 53(b), 57b, 6102(c), and 6105(b).

Venue is proper in this district under 28 U.S.C. j 1391(b) and 15 U.S.C. j 53(b).

PLM NTIFF

8. The FTC is an independent agency of the United States Government created by

stamte. 15 U.S.C. jj 41-58.The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C. j 45(a),

which prohibits unfair. or deceptive acts or practices in or affecting commerce. The FTC also

enforces the Telemarketing Act, 15 U.S.C. jj 6101-6108. Ptzrsuant to the Telemarketing Act,


the FTC promulgated and enforces the TSR, 16 C.F.R. PM 310, which prohibits deceptive and

abusive telem arketing acts or practices.

9. The FTC is authorized to initiate federal district court proceedings, by its own

attorneys, to enjoin violations of the FTC Act and the TSR and to secure such equitable relief as

may be appropriate in each case, including rescission or reform ation of contracts, restitution, the

refund of monies paid, and the disgorgement of ill-gotten monies. 15 U.S.C. jj 53(b),

56(a)(2)(A)-(B), 57b, 6102(c), and 6105(b).

DEFENDANTS

Defendant A+ Financial Center, LLC (11A+''), also doing business as Accelerated

Financial Centers, LLC, is a Florida limited liability com pany with its principal place of business

at 10258 S. US Highway 1, Port Saint Lucie, Florida 34952. A+ transacts or has transacted

business in this district and tluoughout the United States. At a11 tim es m aterial to this Complaint,

acting alone or in concert with others, A+ has advertised, m arketed, distributed, or sold credit

card interest rate reduction services to consllm ers throughout the United States.

Defendant Accelerated Accounting Services LLC CûAccelerated Accountinf') is a

Florida lim ited liability company with its principal place of business at 10256 S. U S Highway 1,

Port Saint Lucie, Florida 34952.Accelerated Accounting transacts or has transacted business in

this district and throughout the United States.At all tim es material to this Com plaint, acting

alone or in concert with others, Accelerated Accounting has advertised, marketed, distributed, or

sold credit card interest rate reduction services to consllm ers throughout the United States.

Defendant Christopher L. Miano tttchris Miano'') is the Managing Member of

Accelerated Accounting and a manager of A+.At a11 times material to this Complaint, acting

alone or in concert with others, Chris M iano has formulated, directed, controlled, had the

authority to control, or pm icipated in the acts and practices of A+ and Accelerated Accounting,

4


including the acts and practices set forth in this Complàint. Defendant Chris M iano resides in

this district and, in connection with the m atters alleged herein, transacts or has transacted

business in this district and tluoughout the United States.

Defendant Dana M. Miano (ttDana Miano'') is the Managing Member of A+ and a

m anager of Accelerated Accotmting. At all tim es material to this Complaint, acting alone or in

concert with others, Dana M iano has formulated, directed, controlled, had the authority to

control, or participated in the acts and practices of A+ and Accelerated Accounting, including the

acts and practices set forth in this Complaint. Defendant Dana M iano resides in this district and,

in connection with the matters alleged herein, transacts or has transacted business in this district

and throughout the United States.

14. Defendants A+ and Accelerated Accounting (collectively, ttcorporate

Defendants'') have operated as a common enterprise while engaging in the deceptive acts and

practices and other violations of law alleged below. Defendants have conducted the business

practices described below through an interrelated network of companies that have common

ownership, ofticers, m anagers, business functions, employees, and oftice locations, and that have

comm ingled funds and engaged in a com mon schem e. Because these Corporate Defendants

have operated as a common enterprise, each of them is jointly and severally liable for the acts

and practices alleged below.Defendants Chris M iano and Dana M iano have fonnulated,

directed, controlled, had the authority to control, or participated in the acts and practices of the

Corporate Defendants that constitute the common enterprise.

COM M ERCE

At all times material to this Complaint, Defendants have maintained a substantial

course of trade in or affecting commerce, as tûcommerce'' is defined in Section 4 of the FTC Act,

15 U.S.C. j 44.


DEFENDANTS' BUSINESS PM CTICES

16. Since at least November 2009, Defendants have engaged in a telem arketing

schem e in which they falsely guarantee consum ers that they can reduce the constlmer's credit

card interest rates and save the conslzm er thousands of dollars if the consum er pays Defendants

an up-front fee.

17. In tnzth and in fact, Defendants' guarantees are deceptive because most banks will

not agree to lower a constlmer's interest rates at all or, at m ost, will only agree to a very m odest

reduction in interest rate that falls far short of the significantly 1ow interest rates Defendants

guarantee to constlmers. As such, m ost consum ers who pay Defendants' up-front fee cnnnot

receive the lowered credit card interest rates or savings that Defendants promise dlzring

telemarketing calls.

Defendants' Deceptive Telemarketine Cam paizn

18. Since at least November 2009, Defendants have engaged in a plan, program , or

cnmpaign to advertise, market, promote, offer for sale, or sell credit card interest rate reduction

services through interstate telephone calls to constlm ers throughout the United States.

Defendants, acting directly or through one or m ore intennediaries, contact

consumers through tmsolicited telem arketing calls.

20. In num erous instances, the constlm ers who receive Defendants' tmsolicited

telem arketing calls have registered their telephone mlmbers on the National Do Not Call

Registry (ûiRegistrf') prior to receiving the call.

21. ln nllmerous instances, Defendants, acting directly or through one or more

intermediaries, çtspoof'' their calls by transmitting phony Caller ID infonnation that indicates that

the call is from Gtcard Services'' or som e other similar generic business nam e designed to make

the consdlmer believe that the call is from the constuner's bank or credit card com pany.

6


In numerous instances, Defendants' telemazketing calls deliver prerecorded voice

m essages, comm only known as ûûrobocalls.''

23. The prerecorded messages are typically of a fem ale voice who often says her

nme is ûiltachel.''n

The prerecorded messages offer consum ers the purported opportunity to secure

substantially lower credit card interest rates and instruct consum ers to press a number on their

phone to be connected to a live representative. W hen the constuner presses the number on their

telephone keypad, the consum er is connected to a live representative who works for Defendants.

During telemarketing calls, Defendants do not identify them selves as A+ or

Accelerated Accotmting at the start of the call. Rather, Defendants identify themselves as

representatives of ûtcard Services'' or som e other similar generic business nnm e that sounds like

a bank or credit card company.

26. During telemarketing calls, Defendants guarantee that they can substantially

reduce consumers' credit card interest rates.

During telemarketing calls, Defendants often tell consumers that they can obtain

interest rates as low as 0% to 6% .

28. During telemarketing calls, Defendants often tell consllmers that the credit card

interest rate reductions Defendants will obtain will be permanent or will last for several years.

29. During telem arketing calls, Defendants guarantee that their interest rate reduction

services will provide substantial savings to consumers, typically in the range of $1,200 to $4,000

or more within one year.

30. During telemarketing calls, Defendants often claim their services will allow

consumers to get out of debt three to tive times faster.

7


Dttring telemarketing calls, Defendants often tell constlmers that using their

services will not hurt the consum er's credit and, in fact, that using Defendants' services will

improve their credit because the consllm er will be able to pay off his or her credit card debt

faster.

During telemrketing calls, Defendants often tell consumers that using their

services will not require the consumer to close his or her existing credit cards.

33. During telemarketing calls, Defendants often tell consumers that they can obtain

substantial interest rate reductions on al1 types of credit cards (Visa, Mastercard, American

Express, Discover), regardless of which bank issued the credit card to the consumer.

Dm ing telem arketing calls, Defendants often tell the constlmer initially that the

consumer will not inctlr any out-of-pocket expense in using their services and that, as long as the

consllmer qualities, the consumer will not have to send Defendants a check or money order.

Later in the call, however, Defendants tell the conslzm er that he or she will have

to pay Defendants an up-front fee that typically ranges from $495 to $1,595 in order to obtain the

lowered credit card interest rates.

36. Dtlring telem arketing calls, Defendants often claim that the am ount of

Defendants' fee will be quickly offset by savings the consum er will receive through the

signitk antly reduced interest rates Defendants will obtain for the consllmer.

37. During telemarketing calls, Defendants often tell consumers that to Gûqualify'' for

Defendants' credit card interest rate reduction program , the consum er must have one credit card

that is in ilgood standing.'' Defendants explain to consumers that in order for a credit card to be

in Etgood standingy'' the consumer must be current on his or her payments on that card and not be

over the card's credit lim it.

8


Dlzring telemarketing calls, Defendants tell consum ers that they must provide

Defendants With their credit card nllmber, expiration date, telephone number, last four digits of

their social security num ber, and/or zip code so that Defendants can determine whether the

consumer tçqualifies'' or tdis eligible for'' Defendants' credit card interest rate reduction program .

Defendants use the credit card infonnation provided by the conslzmer to contact

the consumer's bank to determine whether the consumer's card is in good standing and whether

/

the consllm er has a sufficient nmotmt of available credit on his or her card to pay Defendants'

fee.

40. lf the consumer's card is in good standing and has sufficient available credit to

cover Defendants' fee (i.e., at least $500 in available credit), Defendants charge their fee to the

constuner's credit card.

41. Defendants charge their fee to the consllm er's credit card during or immediately

after the telemarketing call, long before Defendants have undertaken any efforts to reduce the

consumer's credit card interest rates.

42. If the consllmer's credit card is not in good standing or does not have enough

available credit to cover Defendants' fee, Defendants claim the consllm er has not ttqualified'' and

ask the constlm er to provide another credit card for qualitication purposes. This process repeats

until either the consllm er provides a credit card that can be charged or the consum er has

t

exhausted a11 of his or her available credit cards.

43. If the consum er is unable to provide a credit card to which Defendants can charge

their fee, Defendants often tell the consumer that he or she has failed to qualify and the call ends.

44. During telemarketing calls, Defendants guarantee that if consumers do not save

the promised nmount of money within one year as a result of lowered credit card interest rates

9


obtained by Defendants, cohsum ers will receive a full refund of 1he cost of Defendants' services.

Defendants' W ritten Claim s

45. A few days after the consumer's credit card is charged, Defendants typically send

the constuner a package of materials relating to their services.

46. In the written package, Defendants make many of the same claims and guarantees

about their services that Defendants made to the consllmer during the initial telemarketing call.

47. Defendants state in their written materials that they tûare a f'ully Licensed and

Bonded agency specializing in skillful debt reduction.''

48. Defendants state in the written materials that ûlgtlhrough skillful negotiation with

kthe eonsumer's credit card) lenders, gDefendantsl will signitkantly reduce the high interest rates

on (the consumer's) current tmsecured debt; thereby allowing (the constlmer'sl monthly

payments to be applied to m ore of the principal, and substantially reducing the tim e it takes to

pay off (the constlmer'sl loansl''

49. ln the written materials, Defendants promise the same guranteed savings that

Defendants told the constlmer during the telemarketing call - i.e., Defendants guarantee in

writing that the consllmer will save at least $1,200 to $4,000 in one year with the lowered

interest rates that Defendants will obtain for the constzm er or else the consumer will receive a fu11

refund.

50.

forms that ask the consumer to list all of his or her credit card mlmbers, interest rates, issuing

bank nnmes, credit limits, balances, and monthly payment nmotmts and to provide various types

The package of m aterials Defendants send to the consum er also includes several

of personal financial information such as the consumer's annual household income and whether

the consumer has ever filed for bankruptcy. Defendants instruct the consumer to complete the

forms with his or her personal financial inform ation and return the signed form s to Defendants.


Defendants' Failure to O btain Lowered Interest Rates

ln som e instances, after the consum er com pletes, signs, and returns the forms,

Defendants initiate three-way telephone calls with the consumer and the customer service

departm ents of the banks that issued the credit cards that the consllmers listed on the form s.

Dtlring these three-way telephone calls, Defendants verbally request, or prompt the consum er to

verbally request, that the bank reduce the consum er's interest rate on his or her credit card.

52. The three-way calls initiated by Defendants are rarely successful in lowering the

consum er's credit card interest rates to the levels Defendants prom ised dlzring the initial

telephone call. ln numerous cases, the banks that issued the consum er's credit card decline to

lower the interest rate at all or, at m ost, agree to a very m odest reduction in the interest rate for a

short period of tim e that falls far short of the rates Defendants guaranteed the consum er in the

initial call.

The three-way telephone calls with the consllmer's credit card issuing banks are

often the total extent of Defendants' credit card interest rate reduction services.

54. After the three-way telephone calls to the consllmer's credit card companies have

failed, Defendants som etimes also advise the consum er to obtain new credit cards with low

introductory rates Cçteaser rates'') and transfer their existing credit card balances to those new

cards.

55.

because consumers are usually unable to qualify for such cards due to poor credit and/or the

ln mlmerous instmwes, the tactic of opening new Gûteaser rate'' cards fails as well,

nm ount of their existing debt.

56. Once Defendants' tactics of three-way calls to the consumer's credit card

compnnies and opening new credit cards with low introductory rates have failed to deliver on the

guaranteed interest-rate reductions, Defendants usually stop returning the constlmer's phone calls

1 1


and otherwise cease com municating with the consum er.

Defendants' Claim s Are False and Deceptive

ln truth and in fact, Defendants' claim that they can obtain substantial interest rate

reductions on a11 types of credit cards (Visa, Mastercard, American Express, Discover),

regardless of which bank issued the credit card to the consumer is false and deceptive because

there are several banks which will not work with Defendants to lower credit card interest rates

for consum ers.

58. In truth and in fact, Defendants' claim s that they can save the consllmer thousands

of dollars by substantially reducing the consumer's credit card interest rates are false and

deceptive because m ost banks will not agree to lower a consumer's interest rates at a11 or, at

most, will only agree to a very m odest reduction in interest rate that falls far short of the

signitk antly low interest rates Defendants guarantee to consumers. As such, most consumers

who pay Defendants' up-front fee cnnnot receive the lowered credit card interest rates or the

savings that Defendants prom ise dtlring telemarketing calls and are tmable to pay their credit

card debts any faster.

59. W ithout a detailed tmderstanding of the conmlm er's individual economic,

financial, credit, and personal circum stances - information Defendants typically do not obtain

from the consllmer during their telemarketing calls - it is unlikely that Defendants can make any

accurate claim regarding what, if anything, the consum er's credit card issuers will do in regard to

lowering the interest rates on the consum er's credit cards.

60. M oreover, regardless of the consllmer's individual economic, tinancial, credit,

and personal circllmstances, most credit card issuers are unlikely to agree to lower a typical

consllmer's interest rate down to as low as 0 to 6 percent, especially if the consumer is current on

his or her payments.

12


Although it is possible that a credit card issuer may agree to signiticant interest

rate reductions for consum ers who are more than 90 days overdue on their payments as a result

of a severe economic crisis (e.g., ajob loss), in such circttmstances, issuers typically require such

consumers to close a11 of their credit card accounts and not open any new credit accotmts in order

to obtain a significantly reduced interest rate.

62. During Defendants' telemarketing calls, however, Defendants tell consumers that

to qualify for Defendants' credit card interest rate redudion program the consumer must have at

least one credit card that is in good standing. Defendants explain to consum ers that in order for

the credit card to be in good standing, the consum er must be current on his or her paym ents on

that cazd and not be over the card's credit limit.M oreover, Defendants tell consumers that

Defendants can obtain the substantially lowered credit card interest rates without having to close

any of his or her existing credit cards. W ith these conditions, it is extrem ely unlikely, if not

impossible, that any credit card issuer would agree to a signiticant interest rate reduction for any

consumer who meets Defendants' qualification criteria (i.e., is not delinquent or over the limit on

at least one credit card account) and who does not want to close a11 of his or her existing credit

cards.

63. Accordingly, in truth and in fact, Defendants' claims that they can save any

consllm er thousands of dollars by substantially reducing the consumer's credit card interest rates

are false and deceptive.

Defendants Rarelv Issue Refunds

64. Consllmers who seek a refund of the up-front fee Defendants collect often have to

file multiple refund requests with Defendants or complain, or tkeaten to complain, to law

enforcement, their credit card companies, or the Better Business Bmeau before Defendants give

any refunds.


Consum ers who do not m ake multiple refund requests or complain, or threaten to

complain to law enforcement, their credit card com panies, or the Better Business Bureau often

do not receive reftm ds.

Defendants' Abusive Telem arketinz Practices

66. W hile telemarketing their program, Defendants, acting directly or through one or

more intermediaries, have made numerous calls to telephone numbers on the National Do Not

Call Registry tsllkegistrf'l.

67. ln num erous instances, Defendants, acting directly or tllrough one or more

intermediaries, also ûtspoof ' their calls by transm itting phony Caller ID inform ation so that call

recipients do not know the source of the calls.

68. In numerous instances, Defendants, acting directly or through one or more

intermediaries, have initiated telem arketing calls that failed to disclose truthfully, promptly, and

in a clear and conspicuous m nnner to the person receiving the call: the identity of the seller; that

the pum ose of the call is to sell goods or services; or the nattlre of the goods or services.

69. ln numerous instances, Defendants, acting directly or through one or m ore

intennediaries, have initiated prerecorded telem arketing calls to consum ers that failed to

promptly disclose the identity of the seller; that the purpose of the call is to sell goods or

services; the natlzre of the goods or services; or the mechanism for asserting a Do Not Call

request.

70. In num erous instances, Defendants, acting directly or through one or more

intermediaries, have initiated telemarketing calls to consumers that deliver a prerecorded

message without first having obtained the consumer's signed express written agreement to

receive such calls by or on behalf of Defendants.

71. Defendants, acting directly or through one or more interm ediaries, have called


telephone numbers in various area codes without Defendants first paying the nnnual fee for

access to the telephone numbers within such area codes that are included in the Registry.

VIOLATIONS OF THE FTC ACT

Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), prohibits itunfair or deceptive acts

or practices in or affecting com merce.''

73. M isrepresentations or deceptive omissions of m aterial fact constitute deceptive

acts or practices prohibited by Section 5(a) of the FTC Act. 15 U.S.C. j 45(a).

COUNT ONE

Misrepresentations in Violation of Section 5(a) (15 U.S.C. j 45(a))

ln numerous instmwes, in connection with the advertising, marketing, prom otion,

offering for sale, or sale of Defendants' credit card interest rate reduction services, Defendants

have represented, directly or indirectly, expressly or by implication, that:

A. Consum ers who ptzrchase Defendants' credit card interest rate reduction

services will have their credit card interest rates reduced substantially,

including to as 1ow as 0% to 6?4,'

Consum ers who plzrchase Defendants' credit card interest rate reduction

services will save thousands of dollars in a short time as a result of

lowered credit card interest rates;

Conmlmers who purchase Defendants' credit card interest rate reduction

services will be able to pay off their debts m uch faster, typically three to

tive tim es faster, as a result of lowered credit card interest rates; and

D. Consllmers who ptzrchase Defendants' credit card interest rate reduction

services will be able to obtain lower interest rates on any credit card,

regardless of the bank that issued the credit card.


ln tnlth and in fact, the representations set forth in Paragraph 74 of this Complaint

were false or not substantiated at the time the representations were made.

76. Therefore, Defendants' representations as set forth in Paragraph 74 of this

Com plaint are false and m isleading and constitute deceptive acts or practices in violation of

Section 5(a) of the FTC Act, 15 U.S.C. j 45(a).

THE TELEM ARKETING SALES RULE

77. Congress directed the FTC to prescribe rules prohibiting abusive and deceptive

telemarketing acts or practices ptlrsuant to the Telemarketing Act, 15 U.S.C. jj 6101-6108. The

FTC adopted the original Telem arketing Sales Rule in 1995, extensively nmended it in 2003, and

nmended certain provisions thereafter. 16 C.F.R. Part 310.

78. As nmended, effective September 27, 2010, and October 27, 2010, the TSR

addresses the telemarketing of debt relief services. The nmendments effective September 27,

2010, nmong other things, prohibit m isrepresentations about material aspects of debt relief

services. The nm endm ents effective October 27, 2010, prohibit sellers and telem arketers from

charging or collecting an advance fee before renegotiating, settling, reducing, or otherwise

altering constlmers' debts.

79. Defendants are Etsellergsl'' and/or titelemarketerlsl'' engaged in Eçtelemal-keting'' of

çidebt relief servicelsl,'' and Defendants have initiated, or have caused telemarketers to initiate,

iloutbound telephone callgsl'' to consumers to induce the ptzrchase of goods or services, as those

terms are defined in the TSR, 16 C.F.R. j 310.2(m), (v), (aa), (cc), and (dd).

80. The' TSR prohibits sellers and telemarketers from misrepresenting, directly or by

implication, in the sale of goods or services, any material aspect of the perfonnance, eftkacy,

natlzre, or central characteristics of the goods or services that are the subject of a sales offer. 16

C.F.R. j 310.3(a)(2)(iii).


As nm ended, effective September 27, 2010, the TSR prohibits sellers and

telemarketers from misrepresenting, directly or by implication, in the sale of goods or serdces,

any material aspect of any debt relief service. 16 C.F.R. j 310.3(a)(2)(x).

82. As nmended, effective October 27, 2010, the TSR prohibits sellers and

telemarketers from requesting or receiving paym ent of any fee or consideration for any debt

relief service before: (a) they have renegotiated, settled, reduced, or otherwise altered the terms

of at least one debt pursuant to a settlem ent agreement, debt m anagem ent plan, or other such

valid contractual agreement executed by the customer; and (b) the customer has made at least

one payment ptlrsuant to that agreement. 16 C.F.R. j 310.4(a)(5)(i).

83. The TSR, as amended in 2003, established a Gtdo-not-call'' registry (the ttNational

Do Not Call Registrf' or çûRegistry'), maintained by the FTC, of consumers who do not wish to

receive certain types of telemarketing calls. Consumers can register their telephone numbers on

the Registry without charge either tlzrough a toll-free telephone call or over the Internet at

www.donotcall.gov.

84. Consllmers who receive telem arketing calls to their registered numbers can

complain of Registry violations the snm e way they registered, through a toll-free telephone call

or over the Internet at www .donotcall.gov, or by otherwise contacting 1aw enforcem ent

authorities.

85. The FTC allows sellers, telem arketers, and other permitted organizations to access

the Registry over the Internet at m .telemrketing.donotcall.gov, to pay any required feets),

and to download the numbers not to call.

86. The TSR prohibits sellers and telemarketers from calling any telephone number

within a given area code unless the seller on whose behalf the call is made has paid the nnnual


fee for access to the telephone numbers within that area code that m'e included in the Registry.

16 C.F.R. j 310.8.

87. The TSR prohibits sellers and telemarketers from initiating an outbound telephone

call to telephone numbers on the Registry. 16 C.F.R. j 310.4(b)(1)(iii)(B).

88. The TSR requires that sellers and telemarketers transmit or cause to be

transmitted the telephone number and, when made available by the telemarketer's canier, the

nnme of the telemarketer, to any caller identitication service in use by a recipient of a

telemarketing call, or transm it the custom er service num ber of the seller on whose behalf the call

is m ade and, when m ade available by the telem arketer's seller, the nam e of the seller. 16 C.F.R.

j 310.4(a)(8).

89.

truthfully, promptly, and in a clear and conspicuous manner, the following information:

A. The identity of the seller',

The TSR requires telem arketers in an outbound telephone call to disclose

B. That the purpose of the call is to sell goods or services; and

The natttre of the goods or services.

16 C.F.R. j 310.4(d).

90. As am ended, effective Decem ber 1, 2008, the TSR prohibits a telem arketer from

engaging, and a seller from causing a telem arketer to engage, in initiating an outbound telephone

call that delivers a prerecorded message to induce the purchase of any good or service unless the

message promptly discloses:

A. The identity of the seller;

B. That the purpose of the call is to sell goods or services; and

The nature of the goods or services.

18


16 C.F.R. j 310.4(b)(1)(v)(B)(ii).

9 1. As am ended, effective Septem ber 1, 2009, the TSR prohibits initiating a

telephone call that delivers a prerecorded message to induce the ptzrchase of any good or service

unless the seller has obtained from the recipient of the call an express agreement, in writing, that

evidences the willingness of the recipient of the call to receive calls that deliver prerecorded

m essages by or on behalf of a specitic seller. The express agreem ent m ust include the recipient's

telephone number and signature, must be obtained after a clear and conspicuous disclosure that

the purpose of the agreement is to authorize the seller to place prerecorded calls to such person,

and must be obtained after a clear and conspicuous disclosure that the purpose of the agreement

is to authorize the seller to place prerecorded calls to such person, and must be obtained without

requiring, directly or indirectly, that the agreem ent be executed as a condition of ptzrchasing any

good or service. 16 C.F.R. j 310.4(b)(1)(v)(A).

92. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. j 6102(c), and

Section 18(d)(3) of the FTC Act, 15 U.S.C. j 57a(d)(3), a violation of the TSR constitutes an

unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the

FTC Act, 15 U.S.C. j 45(a).

VIOLATIONS OF THE TELEM ARKETING SALES RULE

COUNT TW O

M isrepresentations of M aterial Aspects of Perform ance of

Goods and Services in Violation of the TSR (16 C.F.R. j 310.3(a)(2)(iii))

93. In num erous instances, in colmection with the telem arketing of good and services,

Defendants have m isrepresented, directly or by im plication, material aspects of the performance,

eftkacy, nature, or central characteristics of such goods and services, including, but not limited

to, that:


Consumers who purchase Defendants' credit card interest rate reduction


including to as low as 0% to 6% ,.

Consumers who plzrchase Defendants' credit card interest rate reduction

services will save thousands of dollm's in a short time as a result of

B.

lowered credit card interest rates;

Consum ers who purchase Defendmzts' credit card interest rate reduction

services will be able to pay off their debts much faster, typically three to

tive times faster, as a result of lowered credit card interest rates; and

Consllm ers who purchase Defendants' credit card interest rate reduction

services will be able to obtain lower interest ratek on any credit card,

D.

regardless of the bank that issued the credit card.

94. Defendants' acts and practices, as described in Paragraph 93 above, are deceptive

telemarketing acts or practices that violate the TSR, 16 C.F.R. jj 310.3(a)(2)(iii).

COUNT THREE

M isrepresentation of M aterial Aspects of Debt Relief

Services in Violation of the TSR (16 C.F.R. j 310.3(a)(2)(x))

95. In ntlmerous instances on or after Septem ber 27, 2010, in connection with the

telemarketing of debt relief services, Defendants have misrepresented, directly or by implication,

material aspects of the debt relief services, including, but not limited to, that:

A. Consllm ers who ptzrchase Defendants' credit card interest rate reduction


including to as low as 0% to 6% ;

B. Constzmers who ptlrchase Defendants' credit card interest rate reduction


services will save thousands of dollars in a short time as a result of

lowered credit card interest rates',

Consumers who ptlrchase Defendants' credit card interest rate reduction

services will be able to pay off their debts much faster, typically three to

five tim es faster, as a result of lowered credit card interest rates; and

Consumers who purchase Defendants' credit card interest rate reduction

services will be able to obtain lower interest rates on any credit crd,

regardless of the bnnk that issued the credit card.

96. Defendants' acts and practices, as described in Paragraph 95 above, are deceptive

telemarketing acts or practices that violate the TSR, 16 C.F.R. jj 310.3(a)(2)(x).

CO UNT FOUR

Charging or Receiving a Fee in Advance of

Providing Debt Relief Services (16 C.F.R. j 310.4(a)(5)(i))

ln nllmerous instances on or after October 27, 2010, in the course of

telemarketing debt relief services, Defendants have requested or received payment of a fee or

consideration for a debt relief service before: (a) they have renegotiated, settled, reduced, or

otherwise altered the terms of at least one debt pursuant to a settlement agreement, debt

management plan, or other such valid contractual agreement executed by the customer', and (b)

the custom er has made at least one payment pursuant to that agreem ent.

98. Defendants' acts or practices, as described in Paragraph 97 above, are abusive

telemarketing acts or practices that violate the TSR, 16 C.F.R. j 310.4(a)(5)(i).

COUNT FIVE

Violating the National Do Not Call Registry (16 C.F.R. j 310.4(b)(1)(iii)(B))

99. In numerous instances, in cormection with telem arketing, Defendants have


engaged, or caused a telemarketer to engage, in initiating an outbound telephone call to a

person's telephone ntlm ber on the N ational Do N ot Call Registry in violation of the TSR, 16

C.F.R. j 310.4(b)(1)(iii)(B).

COUNT SlX

Failing to Transmit Caller Identification (16 C.F.R. j310.4(a)(8))

100. In num erous instances, in colmection with telemarketing, Defendants have failed

to transm it, or have caused telem arketers to fail to transmit, the telephone number and nnme of

the telemarketer or of Defendants to any caller identitication service in use by a recipient of a

telemarketing call, in violation of the TSR, 16 C.F.R. j 310.4(a)(8).

COUNT SEVEN

Initiating Unlawful Prerecorded Messages (16 C.F.R. j 310.4(b)(1)(v))

101. ln num erous instances on or after September 1, 2009, Defendants have m ade, or

caused others to make, outbound telephone calls that delivered prerecorded m essages to induce

the plzrchase of goods or services in violation of the TSR, 16 C.F.R. j 310.4(b)(1)(v).

COUNT EIG HT

Failing to Make Required Oral Disclosures (16 C.F.R. jj 310.4(b)(1)(v)(B)(ii) and (d))

102. ln num erous instances, including on or after December 1, 2008, in the cotlrse of

telemarketing goods and services, Defendants have made, or caused others to make, outbotmd

telephone calls that deliver a prerecorded message in which the telem arketer or message failed to

disclose truthfully, promptly, and in a clear and conspicuous mnnner to the person receiving the

call:

A. The identity of the seller;

B. That the purpose of the call is to sell goods or services; or

C. The nature of the goods or services.


Defendants' acts and practices, as alleged in Paragraph 102 above, are abusive

telemarketing acts or practices that violate the TSR, 16 C.F.R. jj 310.4(b)(1)(v)(B)(ii) and (d).

COUNT NINE

Failing to Pay National Registry Fees (16 C.F.R. j 310.8)

104. ln numerous instances, in connection with telem arketing, Defendants have

initiated, or caused others to initiate, an outbound telephone call to a telephone number within a

given area code when Defendants had not, either directly or through another person, paid the

required annual fee for access to the telephone num bers within that area code that are included in

the National Do Not Call Registry, in violation of the TSR, 16 C.F.R. j 310.8.

CONSUM ER INJURY

Consumers have suffered and will continue to suffer substantial injury as a result

of Defendants' violations of the FTC Act and the TSR. In addition, Defendants have been

tmjustly enriched as a result of their unlawful acts and practices. Absent injtmctive relief by this

Court, Defendants are likely to continue to injure consllmers, reap unjust emichment, and harm

the public interest.

THIS COURT'S POW ER TO GRANT RELIEF

106. Section 13(b) of the FTC Act, 15 U.S.C. j 53(b), empowers this Court to grant

injtmctive and such other relief as the Court may deem appropriate to halt and redress violations

of any provision of law enforced by the FTC. The Court, in the exercise of its equitable

jmisdiction, may award ancillary relief, including rescission or reformation of contracts,

restitution, the refund of monies paid, and the disgorgement of ill-gotten monies, to prevent and

rem edy any violation of any provision of 1aw enforced by the FTC.

107. Section 19 of the FTC Act, 15 U.S.C. j 57b, and Section 6(b) of the

Telemarketing Act, 15 U.S.C. j 6105(b), authorize this Court to grant such relief as the Court


tinds necessary to redress injtu'y to consumers resulting from Defendants' violations of the TSR,

including the rescission or reformation of contracts, and the reftmd of money.

PR AYER FOR RELIEF

Wherefore, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C.

jj 53(b) and 57b, and Section 6(b) of the Telemarketing Act, 15 U.S.C. j 6105(b), and the

Court's own equitable powers, requests that the Court:

A. Award Plaintiff such preliminary injunctive and ancillary relief as may be

necessal'y to avert the likelihood of consumer injury during the pendency of this action and to

preserve the possibility of effective final relief, including but not limited to, temporary and

preliminary injtmctions, an order freezing assets, immediate access, and the appointment of a

receiver-,

B. Enter a permanent injunction to prevent futlzre violations of the FTC Act and the

TSR by Defendants;

Award such relief as the Court finds necessary to redress injury to consumers

resulting from Defendants' violations of the FTC Act and the TSR, including but not limited to,

rescission or refonnation of contracts, restitution, the refund of m onies paid, and the

disgorgem ent of ill-gotten m onies', and

Award Plaintiff the costs of bringing this action, as well as such other and

additional relief as the Court may determine to be just and proper.


Dated: October 23, 2012 Respectfully subm itted,

W ILLARD K . TOM

General Counsel.,,U, ze

. -'e''

.,v>*

J. ..e:.w 'lp...A ..e7

. ' z' a.

.'v u

Bikram Bandy

Tel: (202) 326-2978E-mail: [email protected]

W illiam T. M axson

Tel: (202) 326-2635E-mail: [email protected]

Federal Trade Comm ission

600 Pennsylvania Ave., NW , M ail Stop 11-286

W ashington, DC 20580

Fax: (202) 326-3395

Attorneys for Plaintiff

FEDERAL TRADE COM M ISSION

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plaintiff, the federal trade commission cttc''), for its ...plaintiff, the federal trade...

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